Dubai’s property market – not everyone’s a loser

With property prices in some parts of Dubai said to have dropped by up to 64 per cent last year, it comes as no surprise to read that Knight Frank’s Global House Price Indexranked Dubai as the ninth worst performing property market in the world last year.

It’s the kind of news story that causes people in the UK to rub their hands together and ask friends in Dubai, a bit too gleefully, if their house is now worth less than the paper the sales agreement’s written on – a question that draws a weary sigh from most of us because those type of headline figures only tell a part of the story.

The part that’s always omitted is that, while property prices in Dubai as a whole have fallen 49.7 per cent since their peak in the last quarter of 2008, to think that property here is worthless is like climbing to the top of Mount Everest, falling half way down the cliff face and thinking you’ve landed back at the airport.

A villa at Dubai's Al Barari development - I would if I could

The truth is that, for every horror story about property-gone-wrong in Dubai, there are 10 happy expats living in a home they bought in 2004 or 2005 that’s still worth a chunk more than what they paid for it. And, for every 10 of them, there’s another five sailing around the Caribbean on the profits of the house they bought in 2004 and sold in the first half of 2008.

Call it luck or call it judgement, these are the expats who were in the right place at the right time, did their homework, didn’t overextend themselves financially, didn’t buy multiple properties on credit to “flip” and didn’t get sucked into the craze of buying into ever-more fantastical but unlikely developments. You don’t see these expats looking dejected on “Homes From Hell” because they’ve nothing to look dejected about.

But, back to my point. Property prices across the whole of Dubai actually fell by an average of just 4.7 per cent last year (the 64 per cent that grabbed the headline was only in “some parts” of Dubai), and they’re predicted to fall by another 15 per cent this year.

Emirates 24/7 last week found that plenty of expat professionals still have faith in Dubai: 54 per cent of those whoresponded to a surveysaid theywant to stay in the UAE “for as long as possible” and 16 per cent said they’d like to stay for at least five to 10 years. It’s a long time to pay rent. For them, 2011-2012 will be a great time to buy a property.

My pick, if I had the budget, would be a ridiculously large villa in Al Barari– set in lush botanical gardens, these impressive villas were being sold for up to AED 40 million (£6.8 million) in the boom times. Today, Top Class Real Estate is offering a 6+2 bedroom “Dahlia” villa with over 12,000 square feet of built-up area, landscaped gardens, private infinity pool and views over the botanical gardens for a mere AED 11 million (£1.8 million). Bargain.

Annabel Kantaria is a journalist who moved to Dubai long before most people knew where it was. She doesn’t ride a camel to work; has never seen a gold-plated golf buggy and only rarely has pink champagne for breakfast.